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NHAR Legislation to Address Seller Financing

January 7, 2011

Lynch Public Policy Retreat

Gov. John Lynch, with Public Policy Committee Chair
Lynne Merrill, at the recent NHAR Public Policy Retreat.

 

Government Affairs Update

The New Hampshire Association of REALTORS® is leading a legislative effort in Concord which will impact owners of real property who are providing seller financing on a residential mortgage.

In 2008, Congress passed the Secure and Fair Enforcement for Mortgage Licensing Act (“SAFE Act”) which gave states one year to pass legislation requiring the licensure of residential mortgage loan originators according to national standards.

The SAFE Act is designed to enhance consumer protection and reduce fraud in the residential mortgage industry (commercial transactions are not covered under the SAFE Act). In 2009, New Hampshire passed HB 610, which placed New Hampshire in compliance with the national SAFE Act.

The NH Banking Commission has enforcement responsibilities in the state, and its Commissioner has advised NHAR that under the SAFE Act, an owner of real property would not be permitted to provide seller financing on a residential mortgage unless the person providing the loan was licensed, selling his/her own residence or was making the loan to a direct family member.

NHAR does not agree with the Banking Commissioner’s interpretation of the statute and, in an attempt to clarify the law, has introduced legislation at the State House which would permit a seller up to five such transactions within any 12-consecutive-month period.  NHAR believes this language complies with the federal statute. NHAR thanks Sen. Boutin (R-Hooksett) and Sen. Bradley (R-Conway) for taking a lead on this issue on behalf of NHAR.

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